IEA Editorial Director Kristian Niemietz has written for The Critic arguing that big fiscal events like the Budget have little impact on the economy compared with the coverage they receive.

Kristian wrote:

“Budgets are overrated for a variety of reasons.

“Firstly, Budget speeches contain too many make-work (or rather, make-talk) schemes for the next Budget or the next Autumn Statement…which can then be extended at the next fiscal event. In this way, the government can, in effect, announce the same policy twice, getting more headlines out of a given policy. 

“More importantly, Budget speeches also cover too many spending announcements on what should really be local matters, not national ones: a few quid for a theatre in this town, a few quid for church repairs in that town, and a few more quid for a cultural institution somewhere else, etc.

“This spectacle is, however, inevitable given the UK’s absurdly overcentralised tax system. It would make no sense at all in a place like, say, Switzerland, where local and regional governments are largely self-funding, meaning, they have to raise their own taxes, and can then spend their revenue as they see fit.

“A third reason why Budgets are overrated is that, unless they are fairly drastic, matters of taxation and public spending are not actually all that relevant for the UK’s economic performance.” 

Read Kristian’s full piece here.